The Hedgehog (Hh) family of secreted signaling proteins plays important roles in organogenesis and patterning of the embryo. Loss of the Hh signaling results in severe developmental defects, whereas aberrant activation of the Hh pathway is associated with several common types of human cancer. A thorough understanding of the molecular mechanism of Hh signal transduction is crucial for prevention and remedy of the abnormalities related to the Hh pathway. In mice, Hh signaling is primarily mediated by the Gli2 and Gli3 transcription factors. Gli2 is generally considered to be a transcriptional activator, while Gli3 acts largely as a repressor, though it also has a weak activator function. The distinct functions of Gli2 and Gli3 is primarily attributed to their intrinsic molecular properties, and is also due to the fact that in the absence of Hh signaling, the majority of the full-length Gli3 protein undergoes the proteasome-mediated processing to a C-terminally truncated repressor, while only a small fraction of Gli2 is processed. The processing of both proteins is induced by the phosphorylation of the first four of the six protein kinase A (PKA) sites at their C-termini. Hh signaling inhibits Gli2 and Gli3 processing and generates the full-length Gli2 and Gli3 proteins. However, full- length Gli2 itself is not sufficient to activate Hh target genes and thus has to be converted into an activator; this conversion is also dependent on Hh signaling. To date, the mechanism of production and molecular nature of the Gli2 activator are unknown. Our preliminary studies indicate that post-translational modification plays a critical role in the regulation of Gli2 transcriptional activity. We thus hypothesize that Hh signaling activates full-length Gli2 protein by regulating its post-translational modification. We will test this hypothesis by perusing two specific aims. Aim 1. To understand the biological significance and mechanism of PKA phosphorylation- mediated suppression of Gli2 activity; Aim 2. To understand the role of SUMO modification in the regulation of Gli2 activity and the molecular mechanism underlying it. The completion of the proposed study will significantly advance our understanding of the molecular mechanisms by which Hh signaling regulates Gli2 transcriptional activity. It may also give us insight into the molecular mechanisms of the human birth defects and cancer associated with abnormal Hh signaling. PUBLIC HEALTH RELEVANCE: The Hedgehog (Hh) family of secreted signaling proteins plays fundamental roles in cell fate specification and cell proliferation and differentiation. Loss of Hh signaling results in a wide range of birth defects, whereas aberrant activation of the Hh pathway causes several types of human cancer. Understanding the molecular mechanism of Hh signaling may provide insights into the design of therapeutic agents to modulate Hh pathway activity and therefore prevent or treat birth defects and cancers caused by misregulation of the Hh signaling activity.